Proposal to sell Hotel Syracuse to Boston developer off the agenda - for now

Updated on May 13, 2013 at 05:22 PM EDT

The Hotel Syracuse closed in 2004. The latest plans to renovate and reopen the historic hotel were derailed Friday when an Israeli lender blocked the city of Syracuse's attempt to seize the hotel for back taxes.

Syracuse, NY -- The Syracuse Common Council dropped plans Monday to sell the closed Hotel Syracuse to a Boston company that has proposed a $60 million renovation.

Councilor-at-Large Jean Kessner withdrew from consideration a proposal to sell the historic hotel to Syracuse Community Hotel Restoration Co. 1 LLC for $350,150 after a lien holder paid a portion of the hotel's back taxes on Friday.

Financitech Ltd., of Tel-Aviv, Israel, paid $361,855 of the $515,000 delinquent tax bill on the hotel to
keep the city from seizing it
. Financitech holds a $5 million mortgage on the hotel, which is owned by another Israeli-owned company, GML Syracuse LLC.

Syracuse officials had hoped to seize the hotel for back taxes and sell it to Pyramid Hotel Group, of Boston, to be renovated and reopened. Pyramid formed Syracuse Community Hotel Restoration for the project.

City officials have not given up hope of acquiring control of the hotel, however. They said Friday they were considering taking the hotel by eminent domain.

Ben Walsh, deputy commissioner of the city's Office of Neighborhood & Business Development, said today the city is consulting with its attorneys and has made no decision on whether to go the eminent domain route.

The city likely would use the Syracuse Industrial Development Agency for any eminent domain proceeding. IDAs have wide leeway under state law to take property by eminent domain to facilitate economic development.